The Flat-Tax Debate

Regarding the editorial ''Flat Taxes and Fair Taxes,'' Jan. 29: The effect of a single-income tax rate will be to remove the progressivity of the present system that taxes persons with high incomes at a higher rate than persons with lower incomes. The result of such a change, if the total tax collection is to remain the same, will be to lower the taxes of wealthy taxpayers and raise the taxes of middle-income taxpayers.

We all dislike the present tax system. But we don't need to replace it with a flat tax that protects the poor, exempts the wealthy from taxes, and really socks it to the middle class.

George D. Gamble Clifton Park, N.Y.

In the years of discussion leading up to the tax code overhaul of 1986, two objectives were agreed upon: fairness and simplicity. We didn't do badly on fairness. Unfortunately, simplicity fell by the wayside. To most taxpayers, the 1986 tax code was even more complex.

Simplicity has value, and not only for saving hours of labor. It also creates a climate of voluntary compliance, minimizing the impression that other taxpayers are taking advantage of obscure loopholes so it's OK for the rest of us to cheat. Efforts to simplify the tax code are welcome. But this will not be easy. Even Steve Forbes's ''flat tax'' is going to require a lot of pages of IRS regulations to keep personal expenses from showing up as business expenses - thus decreasing the profits on which tax will be owed.

Fred Hoblit Studio City, Calif.

The editorial fails to make a case for preserving the home-mortgage interest deduction. The unstated rationale is that not taxing home-mortgage interest makes home ownership more affordable. However, this subsidy pushes home prices higher, nullifying any gain in affordability. When a homeowner sells his home, the price he receives is inflated relative to other goods in the marketplace because of the home-mortgage deduction. The result: subsidized wealth accumulation for a segment of the population already wealthier than average. Is this really one of the two deductions most worthy of preservation in a flat-tax system?

Eric J. Klieber Cleveland Heights, Ohio

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